New Toledo Ordinance Bans Source of Rental Income Discrimination
Compliance Tips for Landlords and Property Managers
In December 2020, by an eight to four vote, Toledo City Council members repealed Toledo Municipal Code Chapter 554, entitled “Discrimination Prohibited” and replaced it with a new chapter that adds “source of income” as a “protected class.” Beginning April 14, 2021, Toledo landlords may no longer deny a prospective tenant’s application due to his or her Section 8 or other federal housing voucher.
The new Toledo code provision prohibiting discrimination on the basis of source of income includes two important changes from the prior version of the antidiscrimination law. First, the new law adds source of income to the list of reasons that it is unlawful to treat an individual differently from others (i.e., a protected class). The new law includes Section 8 and other forms of governmental rent subsidies and rent assistance within the definition of source of income.
Second, establishing discrimination under the prior version of the law required a showing that an individual’s status as a member of a protected class is the only reason for their being treated differently. Under the new version of the law, establishing discrimination only requires that an individual’s status in a protected class is a factor leading to their disparate treatment. In other words, violation of Toledo’s antidiscrimination law no longer requires that an individual’s status in a protected class be established as the sole reason for the discrimination.
As a result of this new law, it will now be unlawful to refuse housing to a prospective Section 8 tenant, or anyone else receiving governmental assistance, if the fact that the prospective tenant receives such governmental assistance plays any role in the decision.
Excerpts from the old and new versions of the Ordinance are provided below for textual comparison.
Pros and Cons of the New Ordinance
The obvious goal of the new Ordinance is to prevent prospective tenants, who use vouchers to pay rent but otherwise meet all renting criteria, from being denied housing based on their non-traditional sources of income. Some believe that a lack of income protection laws leads to geographically concentrated poverty—a disservice to society’s most vulnerable groups. Some landlords, for example, include language in their property listings that warns voucher applicants not to apply, i.e. “No Section 8 Tenants.” Under the new Ordinance, such practice will be illegal.
Several Toledo landlords and real estate groups have spoken out against the new Ordinance citing their personal bad experiences with tenants who receive housing assistance. Their chief complaints do not stem from concern over reliable rent payments, but, rather, poor track records for property maintenance and waste. Often in these circumstances, landlords have found themselves covering the costs of tenants’ significant property damages with no recourse.
Tips for Compliance
A violation of the new Ordinance may result in a misdemeanor of the first degree. It is imperative that landlords and property managers cease any differential treatment of Section 8 or other similarly situated rental applicants. Especially considering the now-broadened definition of discrimination, landlords and property managers should: (a) not allow source of income to influence their tenant selection process and (b) do everything possible to avoid the appearance that source of income played a role in their decision. Bear in mind the following:
- The Ordinance does not mean that an applicant with housing assistance must be automatically approved. Where objective red flags appear on any prospective tenant’s record and the individual presents a legitimate risk, the landlord is within his or her right to deny the applicant on that legal basis.
- Continue to conduct background checks and routine screens of all applicants alike. Be sure your screening process is identical for all applicants—do not implement more stringent requirements to applicants receiving housing assistance.
- Cease blatant discrimination. The Ordinance makes it illegal to post property listings with discriminatory language such as “No Section 8 Applicants Allowed,” refuse showings to applicants receiving housing assistance or engage in any other discriminatory conduct due to a prospective tenant’s source of income.
- Do not steer tenants with housing assistance. Accepting Section 8 tenants or tenants with other housing assistance, but only renting apartments to them on select floors or sections of your property is a discriminatory practice known as “steering.” Steering limits applicants’ housing choices and will likely violate the discrimination ban.
- Cooperate with the housing authority. The new Ordinance expressly states that discrimination includes “refusal to cooperate in the process of accepting Section 8 housing choice voucher assistance or payments from other rental assistance programs, including but not limited to refusal to cooperate in housing quality standards inspections by the housing authority.”
Excerpt from Current Ordinance (effective until April 14, 2021): 554.03. Prohibited real estate discrimination
- No person selling or renting real property shall, solely because of race, color, religion, national origin, ancestry, sex, handicap, age, familial status, military status, sexual orientation, gender identity or natural hair types and hair styles or head wraps commonly associated with race, culture or religion:
- refuse to sell or rent property to a purchaser or renter of real property.
- evict from or deny occupancy to a purchaser or renter of any real property.
- make any distinction, discrimination or restriction against a purchaser or renter in the sale, rental, price, terms, conditions or privileges relating to the sale, rental, lease, occupancy of real property or in the furnishing of any facilities or services in connection therewith.
- refuse to show any real property or otherwise attempt to prevent the sale, rental or lease of any real property to a purchaser or renter.
- no person selling or renting real property shall publish, circulate, issue or display, or cause to be published, circulated, issued or displayed, any communication, notice, advertisement or sign of any kind relating to the sale, rental or leasing of real property which indicates any preference, limitation or discrimination based on race, color, religion, national origin, ancestry, sex, handicap, age, familial status, military status, sexual orientation, gender identity, natural hair types and hair styles or head wraps commonly associated with race, culture or religion.
Bolded Ordinance text provided for emphasis.
Excerpt from New Ordinance (Effective April 14, 2021): 554.03. Prohibited real estate discrimination.
- No person selling or renting real property shall, because of Protected Class:
- Refuse to sell or rent
- Evict from or deny occupancy.
- Make any distinction, discrimination or restriction in the eligibility criteria, sale, rental, price, terms, conditions or privileges relating to the sale, rental, lease, occupancy of real property or in the furnishing of any facilities or services in connection therewith.
- Fail to provide complete, accurate, and truthful information.
- Make unavailable or otherwise attempt to prevent the sale, rental or lease of any real property to a purchaser or renter.
(b) No person selling or renting real property shall publish, circulate, issue or display, or cause to be published, circulated, issued or displayed, any communication, notice, advertisement or sign of any kind relating to the sale, rental or leasing of real property which indicates any preference, limitation or discrimination based on Protected Class.
(h) As used in this Section source of income discrimination shall include refusal to cooperate in the process of accepting section 8 housing choice voucher assistance or payments from other rental assistance programs, including but not limited to refusal to cooperate in housing quality standards inspections by the housing authority.
Bolded Ordinance text provided for emphasis.
The article in this publication has been prepared by Eastman & Smith Ltd. for informational purposes only and should not be considered legal advice. This information is not intended to create, and receipt of it does not constitute, an attorney/client relationship.